International crude oil prices rose on Monday as a result of the armed battle between Israel and Palestinian Hamas militants. Meanwhile, India has said that it is closely monitoring the “situation” and would handle it with maturity.
Brent futures on the Intercontinental Exchange (ICE) were now trading at $86.67 a barrel, up 2.47% from the previous close. The November West Texas Intermediate (WTI) contract increased by 2.79% to $85.10 per barrel. Prices increased by more than 4% in early trading on Monday.
He went on to say that such uncertainties drive the march towards more sustainable and cleaner fuels, noting collaborations such as the Global Biofuels Alliance.
Speaking to reporters here on Monday, petroleum and natural gas minister Hardeep Singh Puri said “The place where the action is taking place is the in many respects the centre of the global energy, so we will watch very carefully. And I think as we go along, we will navigate through this.”
According to Sharad Chandra Shukla, director at Mehta Equities, the current escalation in the Israel-Palestine conflict has injected uncertainty into global markets, causing crude oil prices to rise and US Treasury rates to rise.
The current price increase follows a drop last week as traders booked profits. According to US Energy Information Administration (EIA) statistics, petrol demand in the US has dropped, with petrol stockpiles increasing by 6.5 million barrels in the week ending September 29, compared to an increase of 1 million barrels the previous week.
“Oil prices rose more than 4% in early Asian trading on Monday as Hamas attack on Israel threatened to inflame tensions in the Middle East, the source of around a third of the world’s crude, with Iran said to be supporting Hamas,” said Ravindra Rao, head of commodity research at Kotak Securities Ltd.
Even though oil prices rose on Monday, they remain below $90 per barrel. Brent prices have just surpassed $97 a barrel, the highest since 2023, due to supply worries and ongoing OPEC+ production cuts.
The rise in crude oil prices is a big source of worry for India, since it may increase the country’s import cost. India imports over 85% of its energy needs. In FY23, India’s imports of crude oil and petroleum products increased by 29.5% to $209.57 billion.
In September, the Indian crude basket averaged $93.54 per barrel, while on October 6, it was $85.66/bbl.